7 U.S.C. § 946 : US Code - Section 946: Capitalization

Search 7 U.S.C. § 946 : US Code - Section 946: Capitalization

(a) Federal and borrower subscriptions; Federal limitation; report
to President, transmittal to Congress; net collection proceeds
The telephone bank's capital shall consist of capital subscribed
by the United States, by borrowers from the telephone bank, by
corporations and public bodies eligible to become borrowers from
the telephone bank, and by organizations controlled by such
borrowers, corporations, and public bodies. Beginning with the
fiscal year 1971 and for each fiscal year thereafter but not later
than fiscal year 1991, the United States shall furnish capital for
the purchase of class A stock and there are hereby authorized to be
appropriated such amounts, not to exceed $30,000,000 annually, for
such purchase until such class A stock shall equal $600,000,000:
Provided, That on or before July 1, 1975, the Secretary shall make
a report to the President for transmittal to the Congress on the
status of capitalization of the telephone bank by the United States
with appropriate recommendations. As used in this section and
section 931 of this title, the term "net collection proceeds" shall
be deemed to mean payments from and after July 1, 1969, of
principal and interest on loans heretofore or hereafter made under
section 922 of this title, less an amount representing interest
payable to the Secretary of the Treasury on loans to the Secretary
for telephone purposes.
(b) Stock classification; voting stock; one vote rule
The capital stock of the telephone bank shall consist of three
classes, class A, class B, and class C, the rights, powers,
privileges, and preferences of the separate classes to be as
specified, not inconsistent with law, in the bylaws of the
telephone bank. Class B and class C stock shall be voting stock,
but no holder of said stock shall be entitled to more than one
vote, nor shall class B and class C stockholders, regardless of
their number, which are owned or controlled by the same person,
group of persons, firm, association, or corporation, be entitled in
any event to more than one vote.
(c) Class A stock; issuance to Secretary of Agriculture and
redemption; cumulative return
Class A stock shall be issued only to the Secretary on behalf of
the United States in exchange for capital furnished to the
telephone bank pursuant to subsection (a) of this section, and such
class A stock shall be redeemed and retired by the telephone bank
as soon as practicable after September 30, 1995, but not to the
extent that the Telephone Bank Board determines that such
retirement will impair the operations of the telephone bank:
Provided, That the minimum amount of class A stock that shall be
retired each year after said date shall equal the amount of class B
stock sold by the telephone bank during such year. Class A stock
shall be entitled to a return, payable from income, at the rate of
2 per centum per annum on the amounts of said class A stock
actually paid into the telephone bank. Such return shall be
cumulative and shall be payable annually into miscellaneous
receipts of the Treasury.
(d) Class B stock; borrowers as holders; dividend prohibition;
patronage refunds
Class B stock shall be held only by recipients of loans under
section 948 of this title. Borrowers receiving loan funds pursuant
to section 948(a)(1) or (2) of this title shall be required to
invest in class B stock 5 per centum of the amount of loan funds so
provided, by paying an amount equal to 5 per centum of the amount
of each loan advance, at the time of such advance. No dividends
shall be payable on class B stock. All holders of class B shall be
entitled to patronage refunds in class B stock under terms and
conditions to be specified in the bylaws of the telephone bank.
(e) Class C stock; borrowers as purchasers; dividends
Class C stock shall be available for purchase and shall be held
only by borrowers, or by corporations and public bodies eligible to
borrow under section 948 of this title, or by organizations
controlled by such borrowers, corporations and public bodies, and
shall be entitled to dividends in the manner specified in the
bylaws of the telephone bank. Such dividends shall be payable only
from income and, until all class A stock is retired, shall not
exceed the current average rate payable on its telephone
debentures.
(f) Special fund equivalents
If a firm, association, corporation, or public body is not
authorized under the laws of the jurisdiction in which it is
organized to acquire stock of the telephone bank, the telephone
bank shall, in lieu thereof, permit such organization to pay into a
special fund of the telephone bank a sum equivalent to the amount
of stock to be purchased. Each reference in this subchapter to
capital stock, or to class B, or class C stock, shall include also
the special fund equivalents of such stock, and to the extent
permitted under the laws of the jurisdiction in which such
organization is organized, a holder of special fund equivalents of
class B, or class C stock, shall have the same rights and status as
a holder of class B or class C stock, respectively. The rights and
obligations of the telephone bank in respect of such special fund
equivalent shall be identical to its rights and obligations in
respect of class B or class C stock, respectively.
(g) Patronage refunds from remaining earnings after provision for
operating expenses, reserves for losses, payments in lieu of
taxes, and returns on class A and C stock
After payment of all operating expenses of the telephone bank,
including interest on its telephone debentures, setting aside
appropriate funds for the reserve for loan losses, and making
payments in lieu of taxes, and returns on class A stock as provided
in subsection (c) of this section, and on class C stock, the
Telephone Bank Board shall annually set aside the remaining
earnings of the telephone bank for patronage refunds in accordance
with the bylaws of the telephone bank. The telephone bank may not
establish any reserve other than the reserves referred to in this
subsection and in subsection (h) of this section.
(h) Reserve for losses due to interest rate fluctuations
There is hereby established in the telephone bank a reserve for
losses due to interest rate fluctuations. Within 30 days after
December 22, 1987, the Governor of the telephone bank shall
transfer to the reserve for losses due to interest rate
fluctuations all amounts in the reserve for contingencies as of
December 22, 1987. All amounts so transferred shall not be
transferred, directly or indirectly, to the reserve for
contingencies. Amounts in the reserve for interest rate
fluctuations may be expended only to cover operating losses of the
telephone bank (other than losses attributable to loan defaults)
and only after taking into consideration any recommendations made
by the General Accounting Office under section 1413(b) of the
Omnibus Budget Reconciliation Act of 1987.
(i) Investment of RTB Equity Fund
The Governor of the telephone bank may invest in obligations of
the United States the amounts in the account in the Treasury of the
United States numbered 12X8139 (known as the "RTB Equity Fund").